GEISHA KOW­LESSAR ALON­ZO

Are T&T’s hopes of se­cur­ing long-term en­er­gy se­cu­ri­ty through Venezuela’s Drag­on gas project are fad­ing fast?

What was once tout­ed as a game-chang­ing arrange­ment now looks in­creas­ing­ly frag­ile, un­der­mined by Venezuela’s po­lit­i­cal tur­moil- the over­throw of Venezue­lan Pres­i­dent Nicolás Maduro in Cara­cas, its col­laps­ing oil in­fra­struc­ture and the un­pre­dictable weight of US sanc­tions.

Lead­ing voic­es in the en­er­gy and eco­nom­ic sec­tors weigh in on the fu­ture of Drag­on gas, with for­mer en­er­gy min­is­ter Kevin Ram­nar­ine warn­ing that the project’s le­gal stand­ing re­mains cloud­ed by the short-lived US Of­fice of For­eign As­sets Con­trol (OFAC) li­cence and Venezuela’s abrupt de­ci­sion to re­scind agree­ments with this coun­try.

UWI St Au­gus­tine pro­fes­sor emer­i­tus Patrick Wat­son is even more blunt, in­sist­ing the project is “way, way off from hap­pen­ing” and may nev­er ma­te­ri­alise at all, giv­en Venezuela’s po­lit­i­cal up­heaval and its rev­o­lu­tion­ary re­sis­tance to for­eign con­trol of re­sources.

De­vel­op­ment econ­o­mist Dr Mar­lene Attzs adds that Drag­on should be treat­ed on­ly as a strate­gic op­tion, not a cer­tain­ty, stress­ing that it is ex­posed to geopo­lit­i­cal, fi­nan­cial and ex­e­cu­tion risks be­yond T&T’s con­trol.

Yet Pro­fes­sor An­tho­ny Bryan of­fers a more mea­sured view, sug­gest­ing the deal it­self is not in jeop­ardy.

“It will be up to the new gov­ern­ment in Cara­cas to car­ry on with it. The agree­ment still stands un­less some­body can­cels it… it will go through, and even­tu­al­ly it will hap­pen,” said Bryan, an in­ter­na­tion­al re­la­tions ex­pert.

To­geth­er, these per­spec­tives high­light the deep un­cer­tain­ty sur­round­ing Drag­on — a project that could one day bol­ster this coun­try’s nat­ur­al gas se­cu­ri­ty, but which for now re­mains hostage to Venezuela’s in­sta­bil­i­ty, shift­ing diplo­ma­cy and the un­pre­dictable re­al­i­ties of glob­al en­er­gy pol­i­tics.

OFAC li­cence and frag­ile agree­ments

Build­ing on the con­cern re­gard­ing le­gal sta­bil­i­ty, Ram­nar­ine ar­gued the Drag­on project’s foun­da­tions are shaky.

He re­called that the OFAC li­cence — crit­i­cal for T&T’s abil­i­ty to trade en­er­gy with Venezuela — was re­in­stat­ed af­ter Prime Min­is­ter Kam­la Per­sad-Bisses­sar met with US Sen­a­tor Mar­co Ru­bio last Oc­to­ber af­ter the Unit­ed Na­tions as­sem­bly.

“The OFAC li­cence was one of the out­comes of her meet­ing with Ru­bio,” Ram­nar­ine ex­plained. “It was giv­en for a six-month pe­ri­od, which ends in April. Many peo­ple asked, why give it for six months? Per­haps he had known the time­line in his head and couldn’t say it.”

But the li­cence was quick­ly over­shad­owed by Venezuela’s now in­ter­im Pres­i­dent Del­cy Ro­dríguez’s de­c­la­ra­tion late last year that all en­er­gy agree­ments with T&T had been re­scind­ed.

“So we don’t know the le­gal sta­tus of the Drag­on deal,” Ram­nar­ine said, in an in­ter­view on CNC3’s The Morn­ing Brew on Mon­day..

He added that while Drag­on has cap­tured head­lines, oth­er projects de­serve equal at­ten­tion. “Peo­ple keep for­get­ting the Cocuina-Man­akin deal,” he said adding, “That’s an equal­ly im­por­tant arrange­ment be­cause Cocuina-Man­akin is re­al­is­able from an en­gi­neer­ing and pro­duc­tion point of view. It’s very close to BP’s as­sets on the south­east­ern coast.”

The Cocuina-Man­akin field ex­tends across the mar­itime bound­ary be­tween T&T and Venezuela, ap­prox­i­mate­ly 68 miles off Trinidad’s south­east coast.

Ram­nar­ine al­so point­ed to the Man­a­tee project, a reser­voir com­plex shared with Venezuela. “We hap­pen to be pro­duc­ing the gas which is on our side. Ul­ti­mate­ly, if we could get gas from Venezuela in­to Trinidad, that’s good. But the time­line for that is any­body’s guess,” he said.

Ram­nar­ine al­so high­light­ed Venezuela’s de­cay­ing en­er­gy in­fra­struc­ture, not­ing that oil pro­duc­tion has col­lapsed to be­low one mil­lion bar­rels per day — equal to what Guyana now pro­duces. “They used to pro­duce over three mil­lion bar­rels of oil per day as re­cent­ly as 12 or 15 years ago. Their pro­duc­tion has large­ly col­lapsed and their in­fra­struc­ture is de­cay­ing. It’s go­ing to re­quire a tremen­dous amount of mon­ey to bring back their oil in­dus­try,” he said.

De­spite this col­lapse, Venezuela still holds the largest proven oil re­serves in the world — around 300 bil­lion bar­rels — and an es­ti­mat­ed 200 tril­lion cu­bic feet of nat­ur­al gas. “Sig­nif­i­cant parts of that are with­in strik­ing dis­tance of Trinidad and To­ba­go, where we have a short­age,” Ram­nar­ine said. “If it could all work out in our favour, then that’s great. But no­body at this point in time could re­al­ly pre­dict how this sce­nario will un­fold.”

Wat­son: Drag­on is way off

Echo­ing Ram­nar­ine’s cau­tion re­gard­ing the time­line, Wat­son warned that the Drag­on field may nev­er be­come op­er­a­tional at all.

“Drag­on is not avail­able for a long time to come,” Wat­son said not­ing, “If it’s go­ing to be avail­able at all, it will be many years from now.”

He al­so point­ed to Venezuela’s po­lit­i­cal chaos — mass protests, ru­mours of of­fi­cials flee­ing abroad, and con­flict­ing ac­counts of who is in charge.

While some cel­e­brate the cap­ture of Maduro, Wat­son not­ed that much of his gov­ern­ment re­mains in­tact, ar­gu­ing that Venezue­lans, steeped in rev­o­lu­tion­ary tra­di­tions dat­ing back to Simón Bolí­var and re­in­forced by Hugo Chávez, would re­sist any at­tempt by for­eign pow­ers to seize con­trol of their oil and gas.

“They are not go­ing to sit back and let the Amer­i­cans take over,” he said.

Wat­son al­so crit­i­cised T&T’s re­liance on short-term OFAC li­cences.

“You give me six months for an en­er­gy agree­ment that takes decades to op­er­a­tional­ize? Clear­ly, that thing was not go­ing to hap­pen,” he re­marked.

Attzs: Drag­on Is a strate­gic op­tion, not a cer­tain­ty

Attzs ap­proached the is­sue from a risk-man­age­ment per­spec­tive as she re­in­forced the idea that T&T can­not af­ford to put all its eggs in the Venezue­lan bas­ket. She said that the Drag­on arrange­ment must be viewed through a clear eco­nom­ic risk-man­age­ment lens.

“The Drag­on gas arrange­ment rep­re­sents a strate­gic op­tion, not a cer­tain­ty,” she said, adding “If dis­cus­sions on this arrange­ment re­sume in the near term, the Drag­on gas project could, over the medi­um term, sup­port do­mes­tic gas se­cu­ri­ty and down­stream ac­tiv­i­ty.

“How­ev­er, as it cur­rent­ly stands the Drag­on gas arrange­ment re­mains ex­posed to geopo­lit­i­cal, fi­nan­cial and ex­e­cu­tion risks – all of which are be­yond T&T’s con­trol.”

Attzs fur­ther point­ed to the Cen­tral Bank’s re­cent mon­e­tary re­port, which sig­nalled oth­er en­er­gy sec­tor de­vel­op­ments that could pro­vide fis­cal and for­eign ex­change re­lief if re­alised. She warned against bas­ing rev­enue or for­eign ex­change ex­pec­ta­tions on un­cer­tain out­comes.

“Re­peat­ed ex­ter­nal shocks — whether geopo­lit­i­cal, en­er­gy-re­lat­ed, or fi­nan­cial — high­light our eco­nom­ic vul­ner­a­bil­i­ty. Re­duc­ing our struc­tur­al vul­ner­a­bil­i­ties and ad­vanc­ing eco­nom­ic di­ver­si­fi­ca­tion should there­fore re­main high on the na­tion­al agen­da,” she stressed.

Bryan: “Even­tu­al­ly It Will Hap­pen”

How­ev­er, this cau­tious con­sen­sus is met with a dif­fer­ent in­ter­pre­ta­tion by Bryan. He main­tains that the un­der­ly­ing com­mer­cial log­ic of the deal re­mains in­tact de­spite the po­lit­i­cal noise.

Bryan of­fered a more op­ti­mistic view, sug­gest­ing that the Drag­on deal it­self is not in jeop­ardy.

“It will be up to the new gov­ern­ment in Cara­cas to car­ry on with it,” he said. ‘The agree­ment still stands un­less some­body can­cels it. They had their say­ing to each oth­er, their prob­lem, but that doesn’t af­fect the deal. It’s just up to the gov­ern­ments to car­ry on the deal.”

Bryan ac­knowl­edged that the oil and gas busi­ness is sub­ject to com­plex con­trac­tu­al agree­ments and lengthy ne­go­ti­a­tions, but he sees no rea­son why Drag­on should not even­tu­al­ly move for­ward.

“It will go through, and even­tu­al­ly it will hap­pen,” he said.

Time­line of the Drag­on gas deal:

* De­cem­ber 2016: Fromer PM Dr Kei­th Row­ley and Venezue­lan Pres­i­dent Nicolás Maduro sign a gov­ern­ment-to-gov­ern­ment agree­ment to ex­plore the Drag­on field, lo­cat­ed in Venezue­lan wa­ters but close to T&T’s Hi­bis­cus plat­form.;

* Au­gust 2018: A for­mal com­mer­cial term sheet is signed in Cara­cas. The plan is to build a 17km pipeline to trans­port gas to T&T for pro­cess­ing and ex­port as Liq­ue­fied Nat­ur­al Gas (LNG);

* 2019: The US im­pos­es heavy sanc­tions on Venezuela’s state oil com­pa­ny, PDVSA, ef­fec­tive­ly freez­ing the project. In­ter­na­tion­al banks and com­pa­nies (in­clud­ing Shell) are un­able to fa­cil­i­tate the deal with­out risk­ing U.S. penal­ties;

* 2020–2022: The project re­mains in “lim­bo” as T&T strug­gles with de­clin­ing do­mes­tic gas pro­duc­tion, lead­ing to the idling of At­lantic LNG’s Train 1;

* Jan­u­ary 2023: The US Trea­sury’s OFAC (Of­fice of For­eign As­sets Con­trol) grants T&T a two-year waiv­er to de­vel­op Drag­on, with a strict con­di­tion: No cash pay­ments to Venezuela. Pay­ments must be “in kind” (e.g., food or med­i­cine);

* Oc­to­ber 2023: Fol­low­ing an elec­toral deal be­tween Maduro and the op­po­si­tion, the US eas­es sanc­tions. The OFAC waiv­er is amend­ed to al­low for cash pay­ments in USD;

* De­cem­ber 2023: Venezuela of­fi­cial­ly grants a 30-year li­cense to Shell (as op­er­a­tor) and T&T’s Na­tion­al Gas Com­pa­ny (NGC) to de­vel­op the field;

* April 2024: Amidst a shift in US for­eign pol­i­cy and the reim­po­si­tion of sanc­tions by the Trump ad­min­is­tra­tion, the OFAC li­cence is re­voked, and the project is once again halt­ed;

* Oc­to­ber 2024: De­spite the sus­pen­sion, pre­lim­i­nary ge­ot­ech­ni­cal sur­veys be­gin us­ing the ves­sel Dona Jose 2 to map the pipeline route;

* May 2025: T&T sub­mits a new ap­pli­ca­tion to the U.S. for a re­newed li­cence;

* Oc­to­ber 2025: A break­through oc­curs. Fol­low­ing meet­ings be­tween T&T lead­er­ship and US Sec­re­tary of State Mar­co Ru­bio, a new three-stage OFAC li­cence is grant­ed.

Stage 1: Per­mits ne­go­ti­a­tions through April 2026.

New Con­di­tion: Manda­to­ry par­tic­i­pa­tion of US com­pa­nies in the de­vel­op­ment.

* Present Day (Jan­u­ary 2026)

Jan­u­ary 3, 2026: In a mas­sive geopo­lit­i­cal shift, Pres­i­dent Nicolás Maduro is ex­tract­ed from Venezuela by US mil­i­tary forces.

Cur­rent Sta­tus: The deal is cur­rent­ly in a state of un­cer­tain­ty. While the US has ex­pressed in­tent to have Amer­i­can oil com­pa­nies help re­build Venezuela’s en­er­gy sec­tor, the tran­si­tion to a new gov­ern­ment in Cara­cas (cur­rent­ly led by Del­cy Ro­dríguez) has tem­porar­i­ly frozen all pend­ing en­er­gy deals, in­clud­ing Drag­on.